Home » GBP » GBP to USD » Pound Sterling US Dollar (GBP/USD) Exchange Rate Soars 1.2% on ‘Team May’ Confidence

Pound Sterling US Dollar (GBP/USD) Exchange Rate Soars 1.2% on ‘Team May’ Confidence

GBP/USD Exchange Rate Surges over Optimism that Theresa May will secure Her Position as Prime Minister

The Pound Sterling US Dollar (GBP/USD) exchange rate surged over 1% today, and is currently trading at $1.2640, after GBP investors became confident that Theresa May will win a no-confidence vote scheduled for this evening, and further cementing her position.

GBP was also strengthened by yesterday’s release of the UK average earnings figures for October, which showed a better-than-expected increase and moved to a 10-year high.

USD, meanwhile, has remained volatile after last week’s arrest of Chinese comms giant Huawei’s CFO, Meng Wanzhou, on fraud charges related to dealings with Iran.

However, the ‘Greenback’ found some strength from a Donald Trump tweet yesterday, which hinted at US-China relations were effectively improving:

Pound Sterling US Dollar (GBP/USD) Exchange Rate Soars on ‘Team May’ Confidence

The GBP/USD exchange rate soared despite what could be taken as bad news regarding the government, as confidence in Theresa May winning a no-confidence vote this evening encouraged GBP traders.

Norman Smith, the BBC’s Assistant Political Editor, commented that there ‘is a growing confidence in team May that they can win this.’

However, with Brexit in a state of flux as May’s position as Prime Minister is threatened, trade in the Pound (GBP) slowed markedly.

Political news aside, tomorrow will see the release of the UK’s RICS Housing Price Balance survey for November, and with an expected decrease by -9% against September’s -10% this could potentially dampen appetite for Sterling.

USD/GBP Exchange Rate Plummets as US-China Trade Tensions Diminish ‘Greenback’ Appetite

The US Dollar (USD) had been struggling over the last week with US-China trade tensions having once again flared up after the arrest of Huawei’s CFO.

However this all changed when it was reported that China would reportedly cut its US car tariffs by 15%, lending support to the ‘Greenback’.

Aside from political news, the ‘Greenback’ was slightly weakened by the today’s release of the US MBA mortgage application figures which showed a decrease against last month.

USD found some strength from the slew of US data releases today, with the most notable being in the increase of November’s Consumer Price Index figures, which showed a 2.2% increase on October’s 2.1%.

Later on today will see the release of the US monthly budget statement for November, which is expected to decrease.

GBP/USD Outlook: UK Leadership and US-China Tensions in Focus

The GBP/USD exchange rate is likely to be driven by political forces this week, with continuing uncertainty hitting the UK’s Brexit negotiations as Theresa May’s position as Prime Minister is called into question.

The Pound (GBP) could, however, face further volatility if May receives a majority vote of no-confidence from Conservative MPs, throwing the UK back into a state of Brexit uncertainty.

USD meanwhile remains sensitive to ongoing US-China trade relations, with traders paying close attention to any further signs of easing geopolitical woes.

Tomorrow will see another raft of US data release, with the most notable being the continuing jobless claims figures for November, which are expected to increase.

These will be followed by the release of initial jobless claims figures which are expected to decrease.

Friday will see the GBP/USD exchange rate affected by a more significant set of US data releases, with ‘Greenback’ investors taking particular note of the retail sales figures for November for any signs of an increase ahead of holiday season.